1-14-2008

One of the more interesting phenomena to emerge from the U.S. debacle in Iraq is the demise of the uni-polar world that rose from the ashes of the Cold War. A short decade ago the U.S. was the most powerful political, economic and military force on the planet. Today its army is straining under the weight of an unpopular occupation, its economy is careening toward recession, and the only “allies” we can absolutely depend on in the United Nations are Israel, Palau, and the Marshall Islands.

Rather than the “American Century” the Bush Administration neo-conservatives predicted, it is increasingly a world where regional alliances and trade associations in Europe and South America have risen to challenge Washington’s once undisputed domination.

When Argentina thumbed its nose at the U.S.-dominated World Bank and International Monetary Fund, it had the powerful Mercosur trade association to back it up. When the U.S. tried to muscle Europe into ending agricultural subsidies (while keeping its own) the European Union refused to back down.

And now India, China and Russia are drifting toward a partnership—alliance is too strong a word— that could transform global relations and shift the power axis from Washington to New Delhi, Beijing, and Moscow.

It is a consortium of convenience, as the interests of the three countries hardly coincide on all things.

In security matters, for instance, the Chinese look east toward Taiwan, the Indians north to Pakistan, and the Russians west at an encroaching North Atlantic Treaty Organization (NATO). There are still tensions between China and India over their 1962 border war, and bad feelings between Russia and China go all the way back to the Vietnam War.

But growing trade, security issues, and an almost insatiable hunger for energy has brought the three together in what Russian President Vladimir Putin calls a “trilateral” relationship.

The initial glue was a common interest in the gas and oil supplies of Central Asia.

In 2001, China, Russia, Uzbekistan, Kazakhstan, Turkmenistan, Tajikistan, and Kyrgyzstan formed the Shanghai Cooperation Organization (SCO) to challenge U.S. moves to corner Central Asia’s gas and oil reserves and to counter the growing presence of NATO in the Pacific Basin. SCO has since added India and given observer status to Iran, Pakistan, Mongolia, and Afghanistan.

Access to energy is almost an existential issue for China and India. China imports half its oil, and energy shortages could derail the highflying Chinese economy. India imports 70 percent of its oil, and, unlike China, it has no strategic reserves.

Both nations have made energy a foreign policy cornerstone. China is pumping billions of dollars into developing Caspian Sea oil and gas fields and building pipelines, while India is busy negotiating a pipeline deal with Iran.

The India-Iran deal has come under considerable pressure from Washington. Nicholas Burns, U.S. Undersecretary of State for Political Affairs, told the Financial Times that Washington hoped “very much that India will not conclude any long-term oil and gas agreements with Iran.”

However, Indian Finance Minister Palaniappan Chidambaram says, “We should do it—Iran has the gas and we need the gas.” India is estimated to have up to $40 billion in gas and oil interests in Iran, and the pipeline is projected to cost $10 billion.

To much unhappiness in Washington, China just inked a $2 billion deal to develop Iran’s Yadavaran gas and oil field.

The International Energy Agency predicts that energy needs will be 50 percent higher in 2030 than they are today, and that developing countries will soak up 74 percent of that rise. China and India will account for 45 percent of those energy needs, and by sometime after 2010, China will be the largest energy user in the world.

This past October, the nations which border the Caspian Sea—Russia, Iran, Azerbaijan, Kazakhstan and Turkmenistan—jointly declared that they “will not allow other countries to use their territories for acts of aggression or other military operations against any party.” The declaration was seen as directly aimed at U.S. bases in Azerbaijan, Kyrgyzstan and Turkmenistan.

There are also growing trade ties among China, India and Russia.

Trade between India and China was $24 billion in 2007, the same as trade between India and the U.S., and is projected to jump to $40 billion by 2010. Both nations have agreed to reopen an overland route through the Himalayas that has been closed for 44 years.

In 1992 India launched its “Look East” policy, and Asia now constitutes 45 percent of India’s trade. India is the third largest economy in the region, followed by China and Japan.

India desperately needs up to $500 billion in investments to upgrade its infrastructure. South Korea and Singapore are already major investors, and the Russians have shown interest as well. India would love a piece of Russia’s $1 trillion in foreign exchange reserves.

There are growing security ties as well, some of which have a decided downside.

China is relying on Russia for many of its new weapons, including the high performance SU-33 fighter, which can be adapted for use on aircraft carriers. The Chinese say they plan to build several carriers, which would allow them to challenge the current U.S. domination of the Taiwan Straits.

India has just concluded an agreement to buy and jointly assemble Russia’s new fighter, the SU-30, which in recent war games outmaneuvered and outfought the U.S. F-16. New Delhi will buy Russia’s fifth generation fighter, the Future Tactical Aviation Concept, rather than the U.S. F-22 or the European F-35. The Russians are also modernizing India’s Vikramaditya aircraft carrier and have agreed to a joint production agreement to build Russia’s new tank, the T-90.

While none of the three countries’ military budgets approach U.S. military spending, never-the-less, tens of billions of dollars are being funneled into armaments at a time of growing economic inequity in all three nations.

According to the United Nations Development Report, inequality in India has grown faster in the last 15 years than it did in the preceding 50. Mortality for children under the age of five is three times that of China, and greater than Bangladesh and Nepal. Some 46.7% of India’s children are underweight, and 44.9 percent are stunted in growth.

China and Russia do not have the same inequity gulf as India, but there is widening economic disparity in both countries that military spending certainly makes more difficult to address.

Another troubling side to this increasing trilateral cooperation is that the three countries have agreed to support one another on the issue of “terrorism” and “separatism.” In practice, that may give China a free hand in its largely Muslim Xingjian Province, and in Tibet. It might mute criticism of Moscow’s war in Chechnya, and give cover for India to step up its military actions against Maoist “Naxilites,” and put the clamps on restive minorities on its northwest border.

The relationship among the three countries can hardly be called an “alliance.” The Indian military regularly takes part in joint military maneuvers with the U.S. and, so far, military cooperation between India, China and Russia is low level. But all have common interests in securing energy resources and, if not confronting the U.S., at least not letting Washington dictate to them on international and internal issues.

The U.S. is still the big dog on the block, but it can no longer just bark to get its way.